(CNN) -- The United States and Venezuela don't agree on many foreign policy issues, but both countries say a newspaper report claiming that Iran is building a missile base in the South American nation is not credible.

A group of engineers from an Iranian Revolutionary Guard-owned construction company has already visited the site of the secret joint project, the German newspaper Die Welt reported this month.

If true, such a development would have the potential of creating an international crisis in the hemisphere. The reported site of the project, on the Paraguana Peninsula, is about 100 kilometers (62 miles) from a U.S. military site in Curacao, and about 120 kilometers (75 miles) from the Colombian border.

The U.S. State Department said Saturday that it reviews all information pertaining to Iranian military involvement in the hemisphere, but that it could not vouch for the report.

"We have no evidence to support this claim and therefore no reason to believe the assertions made in the article are credible," the department said in a statement.

In the wake of the questions raised by the report, Venezuelan Foreign Minister Nicolas Maduro described the allegations as an "extravagant lie."

"There is an international war machine against the prestige of Venezuelan democracy, against the prestige of the Bolivarian Revolution," Maduro said, referring to the country's social revolution. "There is no other way to describe this information that has spread through international media and spokespeople, ex-(Venezuelan) servicemembers."

According to Die Welt, Venezuelan President Hugo Chavez and Iranian President Mahmoud Ahmadinejad signed an agreement in October that included the development of a common medium-range missile.

The goal, the paper reported, is to protect Venezuela from air attacks. Chavez in the past has accused the United States of plotting to invade his country.

The alleged project includes the construction of a command-and-control center, watchtowers and bunkers in which warheads and rocket fuel can be stored, Die Welt reported.

According to the story, Iran has paid tens of millions of dollars for the preliminary phase of the project.

CNN has not independently confirmed the report. But the author of the article, Clemens Wergin, says his sources are credible.

"I can't say anything more than that they are sources from Western security circles with whom I have worked for 10 years, for which I believe they are credible," he told CNN en Espaņol. "My guess is that this is information that is interchanged in Western security circles."

Additional sources have confirmed his version following its publication, he said.

Venezuelan Vice President Elias Jaua Milano denied the report.

"There does not exist any military installation from a foreign country," he said.

Nonetheless, the report is causing waves in Venezuela.

This week, the Venezuelan newspaper Nuevo Pais said it was occupied by order of the mayor of Libertador, a municipality in Caracas. The government told the paper it was expropriating the building where their newspaper is published, but the Inter-American Press Association says that the action was brought on because of the paper's content. Nuevo Pais had reprinted the story from Die Welt, the organization said. Repeated calls to Mayor Jorge Rodriguez were not returned.

Maduro, the foreign minister, said that "Venezuela does have plans to constitutionally and legally strengthen our armed forces, its defense capacity and our defense doctrine concept, doctrine of peace that never implies threats to any country in the continent or the world."

Foes of Iran, however, were not appeased by the Venezuelan statements.

Avigdor Lieberman, foreign minister of Israel, said that his country has not independently confirmed the allegations, but called the report "very serious."

"It would be a military intervention in a Latin country, a development without precedent," he told CNN en Espaņol.

The Iranian government did not immediately comment on the veracity of the report.